Gross Profit Margin
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Category:  
Strategic

Measures the percentage of revenue that exceeds the cost of goods sold (COGS).

What it Measures ?

How much money we make after covering product/service costs.

Relevant StakeHolders 

Finance Team, Product Manager

In-depth Use Case / Real-world Example

Gross Profit Margin is calculated by subtracting the cost of goods sold (COGS) from total revenue and dividing by revenue. If a company has ₹500,000 in revenue and ₹300,000 in COGS, the gross profit margin is 40%. A higher gross profit margin means the company retains more revenue to cover its other operating expenses. It is essential for evaluating pricing strategies and cost control.

KPI Definition

Business Value

Movement Direction

Sample Formula

(Revenue - COGS) / Revenue

Should Aim For
1
2
3
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